Combo strategy that turned $10,000 into $50,000,000 from 12/17/1999 to 11/25/2011 with a 1 week holding period



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@CST15 - Yes, backtesting can determine future returns.  This strategy was originally posted on 1/1/2012 as "103% annualized, 63% win rate" - so how has it done over the past 5 years?

5 year "backtested" results: 1/6/2012 - 3/17/2017: 88% CAGR, 68% win rate. $10,000 grows to $284,000.  This is backtested and NOT real money. You won't compound money anywhere near this rate on a weekly basis. 

Problem is... this is NOT a scaleable strategy as these are small companies and you hold about 3 stocks per week. 
The other, and much LARGER issue, is that Zacks backtesting feature is based on a Friday closing price (for buys) through Thursday closing price (for sells).  Weekly screens do NOT work in my opinion, and I have tested many with real money. There is simply too much "lag" as you will be getting data updates over the weekend and buying on Mondays, not Fridays. I have tested many strategies over the years and my discovery is that weekly strategies that backtest well do not hold up with real money due to the time lag issue.  Also, buying 3 stocks is a very volatile, emotional game leading you to want to abandon it at the wrong time, usually when you're down 30% in a week. I have several other strategies that hold up to 30 stocks, but I rebalance them monthly with real money using Folio Investing's trading platform. These have done well over the past 5 years. I stopped putting real money in weekly strategies many years ago as they don't work.  My advice is to find winning monthly (4 week) backtests and focus on those only. Also, balance your results with a few "growth" strategies as well as "value" strategies as results tend to ying/yang which keeps your capital from suffering large drawdowns causing you to become emotional and self sabotage your results. Make sense?  If not, email me.

Rob Urban
rrurban@gmail.com


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